Three-year capital robbery in the LED industry: from listing to carnival to termination review

[Source: Gaogong LED 's " LED Research Review" magazine April issue reporter / Liu Qiaomei]

Since 2010, all the capitals have “satisfied” and the era of rushing into the LED industry with the trend of saving money is over. Rational cautiousness is the attitude of capital to the LED industry today.

“The return cycle is lengthened, the uncertainty is increasing, the company’s valuation is too high, and the investors’ exit is difficult. In the end, it’s all because of the expectation of return.” Liu Jianyun, president of Shenzhen Lihe Qingyuan Venture Capital Management Co., Ltd. Come, capital's "rational and cautious" attitude towards the LED industry is inextricably linked to expected returns.

In fact, in the eyes of investors, whether or not to withdraw from the IPO after listing is undoubtedly one of the important measures for the success of the project investment. Liu Jianyun said frankly that if the city is not up, the investors will withdraw through repurchase and mergers and acquisitions. However, if the repurchase is withdrawn, the income is generally; if the merger is withdrawn, the income depends on the value of the project.

"Now capital is in a cold period for the LED industry, but its essence is in reflection, observation and waiting period. It should be noted that capital has not lost confidence and interest in the LED industry, still waiting and looking for, waiting for the relative standard of the industry Preface, looking for possible opportunities." Lu Zhenwei, general manager of China Merchants Yinke Investment Management Co., Ltd. said.

From irrational fanaticism to cautious optimism

In the face of promising new energy and national strategic emerging industries, the capital market, which has always been sensitive to smell, has also responded quickly. Since December 2009, the LED sector has bucked the trend, and almost all related stocks have hit record highs for some time.

LEDs used to be the coveted capital of capital. The High-tech LED Industry Research Institute (GLII) continued to count the data on LED industry planning investment. In 2010, China's LED industry contracted investment totaled 217.885 billion yuan, an increase of 248.6%. The investment in epitaxial chips is about 124 billion yuan, accounting for 56.9%; the investment in sapphire substrates is about 22.72 billion yuan, accounting for 10.4%, which is the fastest segment of investment growth, and in 2009, investment in this field accounted for Less than 1%.

In 2011, China's LED industry contracted planned investment amount was about 194.5 billion yuan, down 10.7% year-on-year. Among them, the total planned investment of epitaxial chip project reached about 89 billion yuan, accounting for 46%; the planned investment of sapphire substrate project reached about 37.2 billion yuan, a year-on-year increase of 64%.

In 2012, the newly planned investment in China's LED industry was about 100.3 billion yuan, down 48% year-on-year. The investment hotspot has been transferred from the upstream sapphire substrate and epitaxial chip field to the downstream application lighting field in the previous two years. The newly planned investment in the LED lighting field is 45 billion yuan, accounting for 45% of the total newly planned investment.

For the crazy investment of LED stage, Lu Zhenwei believes that the “profit-seeking” of capital determines that it is bound to pursue the sunrise industry that it believes, but most of the professional capital is actually relatively rational in this “feast”, and the irrational fanaticism is more From short-term profit-seeking capital, some local governments and some industrial enterprises that are about to transform. And this irrational behavior is the result of a combination of factors such as system, consciousness, development pressure, and mentality, and it has its inevitability.

“Acquiring economic benefits is the first subjective driving force of commercial organizations.” Lu Zhenwei said that the reason why China Merchants Bank Yinke has been focusing on the LED industry since its establishment in 2009 has been derived from this. But as of now, no LED projects have been invested.

The reason is that Lu Zhenwei said: "In the early days, it was because the LED industry and technology were not well understood, and they were not familiar with it. In the medium term, they also saw a number of LED companies, but they did not agree with the expectations of entrepreneurs for the development of enterprises. We agree to overestimate the company's valuation, or because we are unwilling to participate in the irrational competition between investors for investment in the enterprise, etc., we gave up the project; in the latter stage, the industry is chaotic, and even the 'bad image' is serious. We keep more attention to less action."

Unlike China Merchants Bank, Shenzhen Lihe Qingyuan Venture Capital Management Co., Ltd. has invested in 4 LED companies including Maoshuo Power, Juji Lighting and Baishi Optoelectronics since 2009. The power supply has successfully landed in the capital market in March of this year.

At present, Lihe Qingyuan Venture Capital has turned to LEDs as “short-term cautious” but “long-term optimistic”. "LED is a trillion-dollar industry. At present, the market penetration rate is still relatively low, but the market space is huge." Liu Jianyun believes that "at this stage, capital will be relatively rational and relatively cautious. The deeper reason is because capital is The return on LED is not optimistic for the time being, the return period is lengthened, the uncertainty is increasing, the valuation is too high, and the exit is difficult. In the end, it is related to the expectation of return."

From listing to carnival to termination review

For LED companies that intend to raise capital to expand their territory, IPO listing has become one of the important channels for companies to finance and optimize their management structure.

According to statistics from the High-Tech LED Industry Research Institute (GLII), in 2010, there were only two LED companies in mainland China that successfully landed in the capital market. In 2011, this number was refreshed into seven; in 2012, the listing of LED companies increased. There are 8 companies that have successfully listed as the main business. Also in 2012, the concept stocks ushered in the troubled autumn, the performance of listed companies changed frequently, which made the subsequent LED enterprise IPO roads increase a few twists and turns.

According to the investigation of "High-tech LED" reporters, the current attitude of investors to the LED industry is basically in a state of "no longer investing" and "continuous attention to not paying". The attitude of the CSRC to the LED industry may be discontinued from the review of several LED-listed companies.

as expected. In 2013, the LED concept suffered a cold spell. "High-tech LED" reporter from the official website of the China Securities Regulatory Commission found that the company that focuses on LED-related business, the list of IPOs that have been terminated for review in 2013 is Dalian Luming Lighting Technology Co., Ltd., Yunnan Blue Crystal Technology Co., Ltd., Beijing Jinlixiang Art Color Technology Co., Ltd., Shengdi Optoelectronics Technology Co., Ltd., Shenzhen Cuitao Automation Equipment Co., Ltd. and other six LED companies.

In Liu Jianyun's view, the first wave of illuminating the LED field in the domestic capital market has passed. Now we have to wait for the second wave, waiting for the company to self-check, strengthen internal management, digest the market, and remove the painful period of the bubble.

"The future battle is still in the lighting market." Liu Jianyun said.


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